Railways Sector in China

An Expert's View about Passenger Rail Transport in China

Last updated: 14 Mar 2011

China is one of the world’s fastest-growing rail and urban rail markets. The next 3 years will see the completion of new railway lines of 26,000km in operation.

Sector briefing Rail Opportunities in China Why China? On 26 Dec 2009, Wuhan-Guangzhou PDL of In Jan 2004, China?s first Medium & Long Term 1,068.6km, the longest high speed rail Rail Net Plan was approved by the State (350km/h) in the world, was in operation. Council, which outlined the plans until 2020. The target for the total operating rails by 2020 In 2010, there will be 4,613km new lines to be was revised in 2008 from 100,000km to over built, of which 1,669km PDLs. By the end of 120,000km and over 16,000km for passenger 2010, the total operating lines will be added up dedicated lines (PDLs). to over 90,000km. The Ministry of Railways (MOR) has signed China is one of the world?s fastest- respectively the strategic agreements with 31 growing rail and urban rail (metro/LRT) provinces/municipalities/autonomous regions, markets. to accelerate rail construction via joint investment. The next 3 years will see the completion of new railway lines of 26,000km in By the end of 2009 operating rail routes in operation in China, with 9,200km of PDLs. China totalled 86,000 km, ranking it number two in the world. There are 6,552km of high For urban transport (Metro/Light Rail Transit - speed rail in operation, among which 3,676km LRT), China now has 10 cities running about new lines with 250-350km/h, and 2,876 868km in total. existing lines with 200-250km/h, ranking number 1 in the world. In addition, over The State has approved the metro/LRT 10,000km are under construction. construction plan of 25 citiee/2,500km, with total investment of about The website link to the map for China railway?s RMB1000bn, and construction of 5,000km existing network is: for 2020. http://www.china- mor.gov.cn/dzdt/tlyyxl_small.html UK Trade & Investment Sector briefing: Rail opportunities in China Find general information on Chinese market conditions on UKTI?s website. The Doing Business Guide for China gives an overview of China?s economy, business culture, potential opportunities and an introduction to other relevant issue ?The next 3 years will see new railway lines of 26,000km in operation in China, with 9,200km of PDLs. The State has approved the metro/LRT construction plan of 25 citiee/2,500km, with total investment of about RMB1000b, and construction of 5,000km for 2020.? UK Trade & Investment Sector briefing: Rail opportunities in China cities of county level. Those stations could also Opportunities be classified as per the rail routes they located, including 158 for Passenger Dedicated Lines In China, the rail sector is split into two sub- (PDLs), 85 for inter-city lines, 292 for general sectors - Railways and Metro/Light Rail Transit main lines, and 15 for upgrading of the existing (LRT), which are under the management of railway passenger terminals/stations . different ministries. The Railways refer to the main lines connecting cities/provinces; while China will build 200 or more stations along the Metro/LRT refers to rail transport inside one 7,000km of PDLs, covering over 200 square city (also called Urban Transport). metres for total construction areas. Among the 200 stations, 100 or more are located in big There are 3 main categories for China rail and medium sized cities. Those new stations equipment manufacturing in China: will accommodate the requirement for a terminal to connect metro, light rail transit ? Railway (passenger) coach with 200km/h (LRT) and other mass transit or social vehicles. and below (????) ? Urban rail (metro/LRT) rolling stocks (?? Co-operation in the Third Countries ???????/??) To date, many countries including the US, ? China railway high-speed (CRH) over Russia, Brazil, Saudi Arabia, Turkey, Poland, 200km/h (??????????) Venezuela, India, Burma, Cambodia, Laos, Thailand, have expressed their intention to Niche areas for potential co-operation invite China to be involved in the co-operation with foreign companies: for rail project construction. Some of those projects have already commenced. ? Co-operation with Chinese partners on engineering consultancy, construction There have been some successful cases, which supervision for China railway PDLs. UK companies worked in partnership with ? Extensive adoption of technology for high- Chinese companies in the third markets. speed passenger and heavy-haul freight transport Urban rail (metro/LRT) ? High-speed Electrified Multiple Units (EMUs) & locomotive and rolling stock technology Based on the recent urban rail (metro/LRT) for 200-km/h (or above) passenger development plan of various cities, there will transportation be over 3,000km in China by 2020. ? Track, bridge, tunnel, culvert, traction, power sully, signalling and communication By 2012, the operating lines in Beijing will be technology, brake, for high-speed rail 440km, and 400km for Shanghai with 13 lines ? Safety inspection and safety control of 300 or more stations. technology During the next 10 years or so, 15 cities in Railway Projects China are planning to build more than 60 lines of 1,700+ kms, with investment required for In China, key projects are usually listed in the about RMB620 billion. See tablet 1 below. national five-year plans. As a result of Chinese government?s fiscal The website link to the map for China railway stimulus initiative, the construction of the first Medium & Long Term Rail Net Plan?and the section of Line 3 of Qingdao (??, Shandong 11th Five-Year Plan (2006-2010). Province) commenced on 26 June 2009. http://www.china- mor.gov.cn/tllwjs/115small.jpg In the same month, the project of Line 1 of Fuzhou (??, Fujian Province) was approve Railway Terminals/Stations and initiated. th During the 11 Five-Year Plan (2006-2010), The urban rail (metro/LRT) construction in the construction of 548 railway passenger other tier 2 and 3 cities were also speeded up terminals/stations commenced, including 25 of in the same period, including Wuxi (??), provincial capitals, 95 regional cities, and 428 UK Trade & Investment Sector briefing: Rail opportunities in China Kunming (??), Changsha (??), Zhengzhou China railways sector and MOR has not yet (??), Ningbo (??)?Nanchang (??). fully adopted international practice in many areas, including certification, independent nd The 2 half 2008 saw the start of the third verification and validation, risk and safety peak period of urban rail (metro/LRT) management. Most of the projects have not construction in China. been open to foreign companies. The import of foreign equipment and supplies Table 1: Metro/LRT Planning in 15 Cities China has only been considered for those projects funded by multi-lateral foreign loans, including No. City Year Lines length Investment World Bank (WB), Asian Development Bank (km) (10b RMB) (ADB), OECF/JBIC, and other government soft 1 Beijing 2006 - 15 447.4 163.6 loans. Other purchases are carried out directly 2015 by MOR and local bidding. 2 Shanghai 2005 - 10 389 143.9 2012 MOR normally requires a percentage of 3 Guangzhou 2004 - 7 127.66 48.701 localisation (local content) on supplies and 2010 purchases of locomotive rolling stock. 4 Shenzhen 2003 - 5 120.7 36.43 2010 The demand for transfer of technology, by 5 Nanjing 2003 - 3 97.6 36.83 MOR, against the fear of IPR concerns by 2015 foreign suppliers means that there is a huge 6 Hangzhou 2004 - 2 82.2 35.57 difference in cost levels and cultural differences 2010 in the approach to technology choice and to 7 Chongqing 2004 - 3 82 24.2 procurement. These are all problems 2012 encountered in doing business in this heavily 8 Wuhan 2004 - 3 59.74 23.722 regulated sector. 2010 9 Chengdu 2004 - 2 54.18 19.718 In addition, there have also been some 2013 difficulties experienced on engineering 10 Tianjin 2003 - 2 51.1 20.96 consulting/supervision, due to cultural and 2010 other differences. 11 Xi'an 2006 - 2 50.3 17.95 2015 If you have any questions on the opportunities 12 Suzhou 2003 - 2 47.4 16.5 above, contact the UKTI China contacts named 2010 in this report. Business opportunities aimed 13 Harbin 2004 - 2 45.53 16.3 specifically at UK companies are added daily to 2013 UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High 14 Shenyang 2004 - 2 40.85 17.18 Commissions and Consulates, across all sectors 2010 and in over 100 markets. 15 Changchun 2003 - 2 37.5 3.898 2010 You can be alerted to China/aerospace Total: 62 1733.16 625.459 opportunities on a regular basis by registering on the UKTI website. More on UKTI?s business Sources: Chinese Railways 2008/04 opportunities service Problems/Constraints/Barriers for UK Companies to do/doing Business in China For a variety of reasons, MOR has been controlling China's railway sector for many years, both rolling stock and equipment manufacturing, and construction and operation of rail networks. UK Trade & Investment Sector briefing: Rail opportunities in China Table 2: China Railway Operation Routes by Table 4: China Railway Investment 2009 end of 2009 (2009?????????) (2009??????????) Source: MOR Rail Statistical Bulletin 2008, Index Completed (??) Index (??) by end of 2009 ±% (??) billion yuan ±% 2008 (???) 2008 Infrastructure 337.554 88.6 Operating Rail Routes 86,000km 7.3 (????) (????) Renewal 22.658 2.6 Double Tracks 33,000km 15.0 (????) (????) Total 360.212 79.1 Double Tracks Rate 38.8% 2.6 MOR Statistic Centre, June 2009 (???) Electrified Lines 36,000km 29.4 Chart 2: China Rail Construction Investment (?????) 2003-2009 (2003-2009?????????) Electrified Rate 41.7% 7.1 (????) Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 700 2003 600 Table 3 China Railway - Rolling 2004 500 Stock/Passenger Coach/Wagon 2009 2005 400 (2009??????????????) 2006 300 2007 200 Index Unit Quantity ±% 2008 100 (??) (??) (??) 2008 2009 0 Locomotive 2003 2004 2005 2006 2007 2008 2009 18,922 2.6 (??) ? Passenger Coach Source: MOR Rail Statistical Bulletin 2008, 49,355 9.5 (??) ? MOR Statistic Centre, June 2009 Wagons 603,082 1.9 (??) ? Table 5 China Railway ? New Projects 2009 (2009??????) Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 Item No.s Investment (b yuan) Chart 1: Investment on Rolling Stock (??) (??) (???/???) Purchasing Double Tracks 26 88.86 2003-2009 (??) (2003-2008?????????????) Electrified Lines 7 14.29 (???) Terminals 22 80 42.12 (??) 70 2003 60 PDL & Intercity Rail 14 2004 294.99 50 (?????????) 2005 40 2006 Newly Built Lines 30 30 87.53 2007 (????) 20 2008 Total 99 527.80 10 2009 0 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic 2003 2004 2005 2006 2007 2008 2009 Centre, 25 March 2010 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 UK Trade & Investment Sector briefing: Rail opportunities in China Chart 4: Passengers Carried by Rail 2003-2009 (2003-2009??????????) Chart 6: Rail Freight 2003-2009: (2003-2009???????????) 1600 2500 1400 1200 2000 1000 1500 800 Passenger bill ion ton km 1000 Carried m 600 500 400 200 0 2003 2005 2007 2009 0 2003 2005 2007 2009 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 Chart 5: Passengers Turnover 2003-2009: (2003-2009??????????) Chart 7: Rail Freight Turnover 2003-2009: (2003-2009???????????) 800 3500 3000 600 2500 Total Volume (m Passenger 2000 tons) 400 Turnover billion 1500 Coa l persons km 200 1000 500 0 0 2003 2005 2007 2009 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 Source: MOR Rail Statistical Bulletin 2009, MOR Statistic Centre, 25 March 2010 UK Trade & Investment Sector briefing: Rail opportunities in China Major events and activities Douglas Barnes First Secretary Outward Mission to China Head of China Transport and Advanced Time: Dec 2010 (to be confirmed) Engineering Team Tel: +86 10 5192 4320 The 7th World Congress on High Speed Fax: +86 10 5192 4218 Rail, Email: douglas.barnes@fco.gov.uk or UIC Highspeed 2010 www.ukti.gov.uk (???????????) Hosts: Jointly by the International Union of Debbie Shi Railways (UIC??????) and Trade & Investment Officer the Ministry of Railways (MOR) Transport (Railways, Airport, Port) Dates: 7-9 Dec 2010 Tel: +86 10 5192 4294 Venue: China National Convention Center Email: Debbie.Shi@fco.gov.uk (Beijing Olympic Green) (CNCC ??????) UKTI?s Tradeshow Access Programme (TAP) Website: http://www.uic- provides grant support for eligible Small & highspeed2010.com.cn Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about MODERN RAILWAYS UKTI support for attendance at overseas (???????????????????) events Dates: December 6-9, 2010 Venue: China National Convention Center, Beijing Website: http://www.modernrailways.com.cn UKTI China is planning to arrange an outward mission to China/HK mission (4 days in mainland China and 2 days in HK). Activities proposed: The programme, including cities apart from Beijing to be visited in Mainland China, is still to be decided. Contact: Derek Griffiths Head, Rail Sector UK Trade & Investment 66-74 Victoria Street London SW1E 6SW tel:00 44 (0) 20 7215 4773 fax: 00 44 (0) 20 7215 4064 UKTI Enquiries: 00 44 (0) 20 7215 8000 and via Minicom for the hard of hearing +44 (0) 20 7215 2471 email: derek.griffiths@ukti.gsi.gov.uk UK Trade & Investment Sector briefing: Rail opportunities in China UKTI contacts Next steps - ? Beijing How UKTI can help Douglas Barnes British companies wishing to develop their First Secretary business in the Chinese market are advised to Head of China Transport and Advanced undertake as much market research and Engineering Team planning as possible in the UK. UKTI?s team in Tel: +86 10 5192 4320 China, with its wide local knowledge and Fax: +86 10 5192 4218 experience, can provide a range of services to Email: douglas.barnes@fco.gov.uk British-based companies wishing to grow their www.ukti.gov.uk business in the Chinese market. Debbie Shi This can include: Trade & Investment Officer ? Provision of market information Transport (Railways, Airport, Port) ? Validated lists of agents/distributors Tel: +86 10 5192 4294 ? Key market players or potential Email: Debbie.Shi@fco.gov.uk customers in the Chinese market ? Establishment of interest of such ? Shanghai contacts in working with you ? Arranging appointments Louise Colwell ? Organise seminars or other events for Consul Trade and Investment you to meet contacts and promote your Tel: +86 21 32792021 company in the Chinese market Fax: +86 21 62797388 Email: Louise.Colwell@fco.gov.uk This work is available via our Overseas Market Introduction Service (OMIS) a chargeable Roger Yao service which assists British-based companies Trade & Investment Officer wishing to enter or expand their business in Tel: +86 21 32792032 overseas markets. Email: Roger.Yao@fco.gov.uk To find out more about commissioning this ? Chongqing work, or accessing other UKTI services and specialist advice, please visit the UKTI website Cecilia Chen to find contact details for your local UKTI Trade & Investment Officer office. Infrastructure; Transport, Creative Industry Tel: +86 23 6369 1559 Fax : +86 23 6369 1525 Email: Cecilia.Chen@fco.gov.uk ? Guangzhou Jacqui Mullen Consul - Trade & Investment Tel: +86 20 8314 3005 Fax: +86 20 8333 6485 Email: Jacqui.Mullen@fco.gov.uk Tracy Peng Trade & Investment Officer Tel: +86 20 8314 3018 Email: Tracy.Peng@fco.gov.uk Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Rail opportunities in China
Posted: 29 September 2010, last updated 14 March 2011

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